The global cannabis market is estimated to be valued at USD 27.7 billion in 2022 and is projected to reach USD 82.3 billion by 2027, recording a CAGR of 24.3% in terms of value.
The market is driven by the rise in the use of cannabis for recreational and medical use. Moreover, there has been an increased legalization of cannabis in the US in states like Virginia in 2021 and Rhode Island in 2022 and in other countries like in Malta in 2021, and Thailand in 2018.
The cannabis industry is growing rapidly and witnessing a double-digit growth rate globally. There are several major companies operating in the cannabis segment that dominate their respective markets. Thus, companies are competing to gain a significant market share.
By application, the recreational segment is projected to grow at the highest CAGR during the forecast period
Recreational cannabis demand is increasing continuously driven by Gen Z consumers. A small but encouraging portion of cannabis products are being sold to women due to a shift in public opinion, and this percentage is predicted to increase over time. Moreover, legalization has have led to a trend toward cannabis-related tourism, with locations producing novel holiday items to entice clients and increasing travel bookings to cannabis-legal destinations.
By compound, the THC-dominant segment is estimated to account for the largest share
THC strain is used for both medical and recreational applications, which increases its demand among manufacturers as well as consumers. Growing Together Research Inc., an Indiana-based biotechnology business, has created a new technique for genetically regulating the expression of Delta-9-THC in cannabis, including the capacity to boost cannabinoid levels in marijuana varieties grown for recreational or medical purposes. Moreover, other forms of THC, such as delta-8-THC, are gaining popularity in addition to the conventional version.
The European region is projected to grow at the highest CAGR during the forecast period
The market in Europe is majorly driven by the awareness of medical benefits of cannabis in the region coupled with the healthcare system present in several European countries that covers the health expenditure of most patients in these regions.
As the legalization of cannabis in European countries is at a nascent stage, this creates a considerable opportunity for companies to establish themselves in the region. Since the beginning of 2019, the European cannabis market has witnessed multiple mergers and acquisitions involving companies focused on medical cannabis. Like in the starting of 2021 medical cannabis firm GW Pharmaceutical was acquired by Jazz Pharmaceutical for USD 6.15 Billion.
Market Dynamics
Drivers
- Rising Cannabis Demand for Medicinal Applications
- Legalization of Cannabis and Rise in Social Acceptance
- Growth in R&D Activities and Technological Advancements to be Precursors for Cannabis Business
- Rising Global Cannabis Sales Helping Online Retailers Expand
Restraints
- Complex Regulatory Structure for Use of Cannabis
- Problems Associated with High Dose of Cannabis Consumption
- Stigmatization of Cannabis Market
- Profit Margins of Manufacturers Shrinks as Cannabis Prices Fall
Opportunities
- Emergence of Cannabis Legalization in Asia-Pacific
- Edibles, Led by Gummies and Chocolates, to Present Additional Growth Opportunities for Cannabis Business
- Inorganic Growth Strategies Adopted by US Cannabis Companies
Challenges
- Intensive Water Consumption and Inability to Maintain Consistency During Cannabis Cultivation
- Cannabis-Producing Businesses Face Financing Difficulties in US
- Advertising and Marketing Restrictions in US
- Supply Chain Challenges Associated with Cannabis in US
Companies Mentioned
- Aurora Cannabis Inc.
- Cannabliss Organic LLC
- Canopy Growth Corporation
- Connected Cannabis Co.
- Cresco Labs
- Curaleaf
- Ecofibre Limited
- Green Thumb Industries
- Henry’s Original
- HEXO Corp.
- Indiva
- Justice Cannabis Co.
- Maricann Group Inc.
- Medical Marijuana, Inc.
- Medmen
- Organigram Holdings Inc.
- Satipharm
- Stenocare
- TerrAscend
- The Cronos Group
- Tikun Olam-Cannbit Pharmaceuticals Ltd.
- Tilray
- Trulieve
- Unrivaled Brand Inc.
- Verano
- Village Farms International Inc.
- VIVO Cannabis Inc.
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